The Eumaeus Guide to Equity Release Valuation
Restating the Case for a Market Consistent Approach (Second Edition)
Synopsis
• The UK equity release sector is permeated by poor valuation practice: as far as we are aware, not a single equity release firm is valuing its No-Negative Equity Guarantees (NNEGs) in a scientifically valid manner.
• This NNEG under-valuation problem is on a large scale and implies correspondingly large over-valuations of Equity Release Mortgages (ERMs).
• The Discounted Projection or ‘Real World’ approach used by the equity release industry is inherently flawed and produces valuations that violate bounds that are known to be inviolable.
• The only scientifically valid valuation approach is the Market Consistent approach, which is also the only approach compatible with accounting principles and technical actuarial standards.
• This manual provides a guide that explains how NNEGs and ERM should (and should not) be valued.
Contents
About Author
ISBN
978-625-7501-76-7
Date of Publication
June 29, 2022
File Size: 4686 KB
Length: xv + 223 pages
This work is licensed under a Creative Commons Attribution 4.0 International License.
